The 34,500 support has been compromised BUT price has not yet closed decisively below the level. The 33K to 35K AREA is STILL a potential higher low location which has yet to show a new buy signal. A break back above 36,500 would satisfy the criteria while still offering attractive reward/risk. As price continues to look ugly, it will cause many to "react" bearishly and overlook the probability of the location.
The herd reacts to information. Whether it is news, dramatic price movement, etc. This may work in the physical world, but it is not very helpful in a highly random and abstract environment of a financial market. We can't actually see what is moving price, although we love to fool ourselves with conventional logic and gimmicks like "the order book" on Coinbase Pro or on Binance, etc. IF any of that information carried any REAL actionable value, it would NOT be so easily available.
Order flow and its unique behaviors or patterns are something we CAN'T SEE. For example, we cannot easily see a large buy order or a group of buy orders accumulating coins or shares, etc. We also cannot see whose accounts those orders belong to, especially at the time of the transaction. THAT would be VALUABLE information, especially if that account or group of accounts were institutional. Imagine if you could actually see Elon Musk's brokerage or exchange account(s), his transaction history, his positions and limit orders in real time?
As a retail trader and outsider, we have no choice but to guess the state of the order flow at any given moment in the face of incomplete information. And the ONLY piece of information that can help is PRICE itself and how it behaves around particular locations. Price action in light of other variables like TREND and LEVELS offers actionable value BUT it is far from PERFECT which is why we must asses the RISK associated with the situation at hand.
From an order flow perspective, the 33K to 35K AREA is one that is likely to attract buying activity. So why would anyone sell here? That would be reacting to what we can actually see, a red candle or the OBVIOUS. A break above 36,500 would IMPLY the buying activity that we are ANTICIPATING. In other words, a low price within a broader BULLISH structure offers a higher probability of reversing because that is the standard behavior of a trend. We know what "should" happen here, but it is up to price provide some PROOF.
IF today's candle closes decisively below 34,500 (like 33K etc.) then there is a greater chance 30K is tested again over the coming days. IF 30K is cleared, ten 26K is the next support to evaluate. The fact that 34,500 was taken out invites more sell orders because it was an established inflection point.
Shorts are not within the scope of our strategy so we don't consider risks from that side of the equation. Even if we were open to such an idea, THIS is NOT the time to be chasing shorts into lows unless your intention is to day trade only. The broader risk of retrace is too high. Things can change REALLY FAST by the time this candle closes.
In order to make better decisions, you need to understand what is going on "inside" the candles without having any way to actually "SEE" what is going on. No news report, white paper, or oscillator will provide ANY actionable information in this regard, all of that is just food for your "conventional wisdom". Compare price now to where price was before within the context of its history (bigger picture trend).
Thank you for considering my analysis and perspective. I hope you find it helpful.
Always providing valuable insight in a realistic way which is quite rare in the crypto world. Thank you for sharing.
hari.h.maira
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As always, very precise analysis, and realistic as well (so hard to find these days). Thanks.
xBTala
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You have been great always. Having a look into Elon's bank accounts as well would be "perfect" :)
Crystal_22
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It is the helpful information indeed.Thanks for sharing it...
dmhotrod
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Solid insight. Thanks for your sharing your thoughts.
barad7
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Thanks perfect and realistic
Slinkman
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Thanks, Perfect timing as well.
Mudrex
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interesting point about the more sell orders after the inflection point was taken out at $34,500. much deeper correction would follow in case 30k is taken out. It is essentially a point of maximum pain right now
Regera
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There's nothing bullish about this structure. The daily 50MA crossed under the 200MA, aka the "death cross" that leads to double digit drops within 30-60 days in the vast majority of instances it has occurred (March 2020 COVID drop being the only recent exception of price moving higher after a death cross and that's because all markets went onto new ATHs after stimulus payments propped up the market thereby negating the death cross quickly). There are multiple complex H&S formations on most major alts, many of them are still up 300%+ from the start of the bull run which means there's plenty of people who can still sell at a profit despite those who came in late and are taking heavy losses. BTC may find support on the weekly 50MA which just so happens to be 30k on the dot (simple MA) and coincides with trendline and horizontal support. However, BTC has already dropped below and pierced the 50EMA weekly at 33.7k which is why price is trying to find support here. Even if the weekly 50MA/EMA support holds BTC has never *recovered* (important key word here) within weeks then gone on to new ATHs after dropping below the daily 200MA. It takes months/years before BTC retakes the 200MA and retests/makes a new ATH. Lastly, if anyone survived through late 2017/2018 this feels eerily similar to it when BTC hit a new ATH everyone thought there was no way BTC would ever see 10k, 8k, 6k, 5k, 4k, 3k again.... and each leg down was a "correction" when in fact it was a crash. BTC had no business going to 64K so don't be surprised if BTC drops 30-80% from current price.